Attached files
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8-K - FORM 8-K - ENDEAVOUR INTERNATIONAL CORP | h82849e8vk.htm |
EX-99.2 - EX-99.2 - ENDEAVOUR INTERNATIONAL CORP | h82849exv99w2.htm |
Exhibit 99.1
2010 Probable Reserves by Region
The following table summarizes Endeavour International Corporations (the Company) probable
reserves by region as of December 31, 2010, based on
an audit of the Companys estimated reserves
prepared by Netherland,
Sewell & Associates, Inc. (NSAI).
SEC Case
Net Gas (Bcf) | Net Oil (MMbbl) | Net Equivalent (Bcfe) | PV-10 ($MM) | |||||||||||||
U.K. |
54.0 | 10.9 | 119.2 | $ | 466 | |||||||||||
U.S. |
30.8 | 0.0 | 30.8 | $ | 14 | |||||||||||
Total Probable |
84.8 | 10.9 | 150.0 | $ | 480 |
The reserve estimates above are based on the 12-month unweighted arithmetic average of the
first-day-of-the-month price for each month in the period (January through December 2010) of
$79.37/Bbl for U.K. oil, $75.96/Bbl for U.S. oil, $6.58/MMbtu for U.K. natural gas and $4.37/MMbtu
for U.S. natural gas.
Strip Pricing
Net Gas (Bcf) | Net Oil (MMbbl) | Net Equivalent (Bcfe) | PV-10 ($MM) | |||||||||||||
U.K. |
53.9 | 10.9 | 119.6 | $ | 645 | |||||||||||
U.S. |
30.9 | 0.0 | 30.9 | $ | 28 | |||||||||||
Total Probable |
84.8 | 10.9 | 150.4 | $ | 673 |
The reserve estimates above are based on strip pricing as of December 31, 2010 of $105/Bbl for U.K.
oil, $102/Bbl for U.S. oil, $12.09/MMbtu for U.K. natural gas and
$6.08 for U.S. natural gas for 2011.
Anticipated 2011 Proved Reserves and Production
The Companys proved reserve base is expected to grow due to near-term production expected from its
interest in the Bacchus oil field and continued growth from its U.S. properties. The Company
anticipates that proved reserves for 2011 may increase to 24.2 MMBOE net of production, with proved developed
reserves accounting for approximately 30% of
those anticipated
total proved reserves and proved undeveloped reserves the
remaining 70%. The Company expects its U.K. properties to account for
3.9 MMBOE net of production of the increase in anticipated
proved reserves, or 62% of the total increase, and its U.S. properties 1.6 MMBOE net of production, or 38% of the
total increase. The Company currently expects total 2011 production to average 5.1MBoe/d, comprised
by 53% U.S. production and 47% U.K. production. For the fourth quarter of 2011, the Company
anticipates that production will average 8,000 to 10,000 BOE/d, with U.K. oil accounting for 67% of
the total, U.S. natural gas 30%, and U.K. natural gas the remaining 3%.
The anticipated reserves as of December 31, 2011 are based on a forward-looking analysis prepared
by the Company and audited by NSAI of the potential reserves maturation schedules for the proved
reserves and future revenue to the Companys interest in certain oil and natural gas properties in
the U.K. and the U.S.
The Companys 2011 reserve and production
estimates described above are based on the assumptions
that (i) three development wells on the Bacchus field will be completed in September, November and
December 2011, respectively, (ii) 15 wells will be drilled on the Companys Haynesville shale play
properties in 2011, (iii) 100% of the wells drilled will be successful and completed on schedule
and (iv) all currently producing wells will continue to produce at current rates. Pricing
assumptions relating to the estimates include (i) oil at $100/bbl in all periods, (ii) U.K. natural
gas at $8.00/Mcf in all periods and (iii) U.S. natural gas at $4.50/Mcf in 2011, $5.00/Mcf in 2012
and $6.00/Mcf thereafter.
Bacchus and Rochelle Development Projects
The first twelve months of production for the Bacchus and Rochelle development projects are
expected to significantly increase the Companys production and reserves. Once they are brought on
line, the first twelve months of production from Bacchus and Rochelle are expected to total 1.4
MMboe and 2.2 MMboe, respectively. That projected production from Bacchus is expected to generate
revenues of $138.5 million and net cash flow of $132.7 million. Similarly, that projected
production from Rochelle is expected to generate revenues of $131.5 million and net cash flows of
$118.6 million. The Bacchus projected production assumes one well is completed in each of months 1,
3 and 4, 100% of which are successful and completed on schedule. The Rochelle projected production
assumes one successful well is drilled and completed in month 1.
The production and operating expense estimates inherent in these projections are based on the
Companys reserve report as of December 31, 2010 audited by NSAI. For more details regarding
the pricing estimates, please read 2010 Probable Reserves by Region.
Cautionary Note Regarding Forward-Looking Statements
The information set forth in this Exhibit 99.1 includes forward-looking statements intended to
qualify for the safe harbors from liability established by the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933 (the Securities Act) and Section 21E of
the Exchange Act. These forward-looking statements include statements that express a belief,
expectation, or intention, as well as those that are not statements of historical fact, and may
include projections and estimates concerning the timing and success of specific projects and our
future production, revenues, income and capital spending. The Companys forward-looking statements
are generally accompanied by words such as estimate, project, predict, believe, expect,
anticipate, potential, plan, goal or other words that convey the uncertainty of future
events or outcomes. You should not to rely on them unduly.
The Company has based these forward-looking statements on our current expectations and assumptions
about future events. While management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business, economic, competitive, regulatory
and other risks, contingencies and uncertainties, most of which are difficult to predict and many
of which are beyond the Companys control. These risks, contingencies and uncertainties, which may
not be exhaustive, relate to, among other matters, the following:
| discovery, estimation, development and replacement of oil and gas reserves; | ||
| decreases in proved reserves due to technical or economic factors; | ||
| drilling of wells and other planned exploitation activities; | ||
| timing and amount of future production of oil and gas; | ||
| the volatility of oil and gas prices; | ||
| availability and terms of capital; | ||
| operating costs such as lease operating expenses, administrative costs and other expenses; | ||
| our future operating or financial results; |
| amount, nature and timing of capital expenditures, including future development costs; | ||
| cash flow and anticipated liquidity; | ||
| availability of drilling and production equipment; | ||
| uncertainties related to drilling and production operations in a new region; | ||
| cost and access to natural gas gathering, treatment and pipeline facilities; | ||
| business strategy and the availability of acquisition opportunities; and | ||
| factors not known to the Company at this time. |
Any of these factors, or any combination of these factors, could materially affect our future
financial condition or results of operations and the ultimate accuracy of a forward-looking
statement. The forward-looking statements are not guarantees of the Companys future performance,
and the Companys actual results and future developments may differ materially from those projected
in the forward-looking statements. In addition, any or all of the Companys forward-looking
statements included in this Exhibit 99.1 may turn out to be incorrect. They can be affected by
inaccurate assumptions we might make or by known or unknown risks and uncertainties, including
those mentioned in Risk Factors in the Companys Annual Report on Form 10-K for the year ended
December 31, 2010. These forward-looking statements speak only as of the date hereof. Except as
required by law, the Company undertakes no obligation to update publicly or release any revisions
to these forward-looking statements to reflect events or circumstances after the date hereof.
These cautionary statements qualify all forward-looking statements attributable to the Company or
persons acting on its behalf.
In addition the Companys actual 2011 production and reserves as of December 31, 2011 will differ from
the projections above, and those differences may be material.